Consider Early Customer Engagement Strategies in Business Model Canvas

In the last post, we spent time looking at the first two BMC elements – Customer Segments and Value Proposition – as your starting point. Identifying your customer’s needs, pain points, and desired outcomes are essential first steps to developing a successful venture. The alignment of these two elements establishes the focal point of the transaction between you and your customer. Once you identify these assumptions, you can look at all the actions necessary to make the transaction repeatable and scalable.


As you begin to understand better the alignment between your product or service ordering and target customers who may want your solution, you can start to outline two other customer-related elements, Customer Relations and Channels. I see these two elements as your venture’s areas of customer engagement; how and where will you connect with your customers to establish a long-term brand relationship?

Customer Relationships

The Customer Relationships section describes how you plan to interact and engage your customers throughout the product lifecycle. I find it helpful to consider what kind of relationship you want to have with your customers from the moment they become aware that your solution exists to becoming future brand advocates.

Many startups place all their emphasis on acquiring new customers. Of course, new customers are critical for early venture traction and continued growth. However, as any experienced entrepreneur realizes, you must plan for all the ways to engage your customer so they remain enthusiastic about your products and brand.

This planning effort is an excellent time to consider how you would like the customer to experience your brand throughout the whole customer journey. I find the sales funnel concept to be helpful for outline strategies for customer engagement. One model identifies this as the Get-Keep-Grow funnel. The “Get” strategies focus on customer acquisition, starting with creating initial awareness that your solution exists, supporting customer investigation about your solution, and motivating the customer to make their first purchase.


These early “Get” strategies set the tone of relationships with your customers. As the customer initially becomes aware that you can solve their problem, they officially enter the sales funnel. Customers can quickly get a sense of your genuine interest in solving their problems versus just looking at them as a revenue-generating transaction. During these early stages, the customer assesses what kind of guide you will be throughout their journey. They will be deciding if you have the expertise necessary to solve their problem. Are you communicating a deep understanding of the problem to be solved? Are you providing clear steps on how your product will solve their problem or fulfill their needs?


Once they determine your level of understanding and expertise, they will also decide whether you are trustworthy, a credible guide. Customers look for consistent messaging, appropriate response times, and overall transparency about their possible experience with your solution.


Just as a human resource professional evaluates a candidate’s fit for a position throughout the application process, so does the customer assess whether your company and its offering are right for them throughout the sales funnel.
As part of your customer relationship strategies, you should consider whether you plan to a “high touch” versus a “low touch” offering or some combination of the two approaches. There are advantages and disadvantages of both methods, so it is essential to consider the choice carefully. High-touch offerings are customized solutions for the needs of a specific customer. Your touchpoints “hold the customer’s hand” with a concierge-style service approach for this kind of offering.The low touch approach can be more appropriate for a “one size fits all” solution. The solution is standardized, and all customers experience it in the same way.


To start, consider how often you will need to engage the customer throughout the sales funnel? This decision is typically associated with the complexity and pricing of the solution. In addition, the more effort and time it takes the customer to purchase and use your offering, the more the touch points increase. So touchpoint frequency and duration of sales funnel journey are positively correlated.


Secondly, the nature of the problem and associated solution may dictate the level of engagement required to support the customer. For example, if the solution to a specific problem requires frequent, in-depth human interaction with the customer, nature will require the high-touch approach. On the other hand, a low-touch strategy may be the optimal approach to solve the problem through standardized information and “prompts” delivered through automation.


While you consider these issues for your business model, there are tradeoffs when deciding low versus high touch. Low-touch approaches lend themselves to automated interactions, thus making it easier to scale for future growth. High-touch transactions can support differentiation in your offering, but the operating costs are higher and harder to scale. In some situations, you may take a hybrid approach where some interactions are low-touch, but you offer premium services with more intensive touch points. Also, many startups by design apply a more high-touch approach during the early iterations of their product to learn how to provide value to the customer best.
In the end, you may want to look at this BMC element as answering the question – How will you keep the customer happy? Questions that you can be asking now are how your venture will address customer questions pre and post-purchase? How will problems or repairs be handled? How will you let customers know about new products or updates to existing products? This element articulates the strategies you will put in place to create a positive, long-term relationship with your customer.

Channels

An essential part of customer engagement is deciding which Channels you plan to use to deliver your solution to the customer. Channels refer to how you deliver your product and communicate with your customer throughout the product lifecycle. These touch points may range from the point of purchase, provision of customer support, and collection of customer feedback.

In today’s business environment, you will probably engage your customers through several channels, sometimes referred to as the omni-channel approach. Today’s customers are used to having access to products and services when and where they want them. This business environment has led to multi-channel access, with physical and online access converging at differentpoints of the customers’ life cycle. One typical example of multi-channel access is ordering a product online and picking it up at a local store. In this case, the business is reaching the customer early in the process online and then providing an option to visit the local store.


Your channel selection should correspond directly with the customer relations strategy and align with the envisioned touch points identified in the customer relationships section. You start with how you expect your customer to learn about your solution in the first place. During early iterations of the BMC, you need to make assumptions about where your customer goes to learn about possible solutions? What sources do they go to for information? Who do they speak with about the problem and possible solutions? In general, how they conduct their research will provide insights into the optimal channels to build initial awareness and interest. By understanding this aspect of customer purchasing behavior, you can decide on the right mix of virtual and physical channels to move them down the sales funnel.


As you consider the purchase stage of the sales funnels, you decide as to the best way to deliver your solution. For example, are you planning on selling and delivering the product directly to the customer (DTC)? Are you planning on distributing through a dedicated third-party marketplace such as Amazon? Does your solution lend itself to e-commerce delivery options, or do you need a physical location? Or a combination of physical and virtual channels?
As with all BMC elements, you will be making many assumptions about the optimal way to engage and deliver your solution to your customers. At this point, you must align the customer relationship and channel strategies. 

Next Up

In our next post, I will review the remaining business model canvas elements focusing on your venture’s operational needs and profit model.

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